Business in India& the Effects of Trends, Trade & Culture

Summary Analysis

India is a very complex country undergoing many positive changes. It is

essential for any person doing business in India to understand these

changes, and to be sensitive to the country. These changes effect every

aspect of the country from the culture to business world.

The current changes in India effect both the business and personal realms

of the entire population.

Increased opportunities and moving toward a stronger government base in

the country will bring more positive movements for India.

Trends in IndiaEconomical, Political, Technological & Social

Trends in India

Economic TrendsEducation, ZipDial, Investment

Education

Lack of proper education for the poor in India has resulted in illiteracy

through adulthood. Illiteracy effects the economy because the illiterate

cannot read advertisements, nor properly use bank accounts.

90% of children from poor families remain illiterate after 4 years of schooling.

30% after 6 years.

With the current levels of education, the poor are expected to reach

universal literacy by 2080.

Education

The following statistics show the percentage of the population of Rural

Manarashtra & Tamil Nadu’s Standad V Age Group who could perform two

digit subtraction sums.

44% in Rural Manarashtra

53% in Tamil Nadu

ZIPDial

Due to pricey telecommunications, Indians will often call a friend and hang

up after one to two rings to let them know they’re home safe without

getting charged.

ZIPDial

Valorie Wagner, a Californian native, has created a company in India

where Indians can call a number, let the line ring once or twice, hang up

and in turn be set up for calls or texts from a company. These calls or texts

will get them entered into a contest, allow them to receive coupons or

place an order.

This is a very unique business model, especially in India.

This model allows companies & brands to publish marketing campaigns, promote

new deals, as well as new products.

ZIPDial

How it works:

Each company has a designated number.

Customers call this number, and after the line rings once or twice, they hang up.

Customers then have the option to receive either calls or texts with the

companies current marketing campaigns.

ZIPDial

Companies currently participating include:

Disney

Gillette

Proctor & Gamble

Indian InfoLine

ZipDial is becoming more mainstream in India with Political Campaigns

participating.

Investment

Due to the fiscal deficit, slow growth, unsustainable inflation, and falling

asset prices have caused India’s government to take a step, a bold step,

toward change.

Reforms have resulted in current investor’s confidence to rise.

A strong domestic market makes for India to be seen as opportunity by

outside investors.

Social TrendsReverse Migration, Divorce, Women On

Reverse Migration

Also known as the “Reverse Brain Drain”

Many Indian’s were forced to return, specifically those from Saudia Arabia,

where cutbacks occurred and all illegal immigrant workers were forced out

of the country.

The “Reverse Brain Drain” untapped unlimited economic potential.

Started thousands of companies, which will provide equal or better

opportunities than there are in the west.

Reverse Migration

50% of returnees are returning for entrepreneurship & business reasons.

NRI’s are unable to start up their own businesses outside of India due to Visa

laws.

Some are turning due to the inability to obtain visas abroad for family

members.

Indians who move back to their native country, are doing so to apply the

education and experiences they obtained while in other countries to

India’s economy.

Divorce

Passion is something American’s strive for. With the booming economy in

India, they too are striving for passion.

With arranged marriages becoming a part of the past, divorce is becoming

more common, and less taboo.

Divorce

Along with divorce rates increasing, dating has become quite popular

among young adults.

This has resulted in marriage out of love, like most in America, rather than

arranged marriages.

Although the divorce rate is low compared to the United States, having

1/100 marriages ending in divorce in comparison to the US’s 1/50, the low

rate can be seen as the result of the high number of married couples in

Indian villages where divorce is still considered to be taboo.

Women on

2013 was the year of women in India with new movements empowering

women and giving them the same opportunities as men.

These movements include rape laws, banking and sports. In 2013, India’s

government and president passed a law that would change the India.

Women on

India now has in place laws against sexual violence to protect women and to deliver justice to those who may break this law.

Punishment from this law ranges from 10 years of jail to the death penalty. The purpose of this law was to deliver the sense of safety to women in India.

Banking has also made headlines in India in the past year. There are banks specifically for women, where men can hold accounts, however most loans are granted to women.

Low cost loans are also granted to women for schooling.

Women in sports have also impacted and empowered women in India.

Pursuing goals has never been such a reality for women in India until the summer of 2013, when a women’s football team from Yuwa won a bronze medal at the Gasteiz Cup in Spain in July.

Political TrendsThe Want for Political Change, Political Parties Invest in Social Media, Intense Political Competition & the Effects on Margin of Victory

The Want for Political Change

There is a definite want for change in the Indian government.

70% of Indians are dissatisfied with the way India is currently being ran.

63% of Indians who participated in a recent Pew Research Center Survey

prefer the Hindu-nationalist opposition Bhartatiya Janata Party (BJP) to lead

the next Indian government.

This research also shows that only 19% would prefer the current left-of-

center governing coalition, Indian National Congress (INC).

The Want for Political Change

The dissatisfaction of the current government is wide-spread.

There is a want for change from all demographics in India.

The BJP is seen as a problem solver for many different areas in the country.

The Want for Political Change

Areas in which need improving and in which the BJP can improve include:

Combating corruption

Creating job opportunities

Limiting rising prices

Reducing terrorism

Helping the poor

Ending political deadlock

Political Parties Invest in Social Media

India has a population of over 1.2 billion, and 160 million people are active users of online services which include social media and email.

With this upcoming election, 160 million of the 790 million eligible voters are not only first time voters but also are between the ages of 18 and 24 years old.

This is the age of technology, and this first time voters are avid social media users.

Politicians are aware of these statistics and are relying more on social media to

influence the upcoming election.

It is expected that there will be a significant investment of both time and marketing spent on social media with the upcoming Lok Shbha elections and the emergence of the AAM Aadmi Party.

Twitter accounts for Narendra Modi Gujart CM (BJP) and newly elected Delhi CM Arvind Kejriwal are already seeing a significant amount of followers.

Political Parties Invest in Social Media

The main reasons for the social media push is to attract young voters and to

spread messages through the web.

With an expectancy to influence the electoral outcome in 160 of 543

constituencies represented by Lok Sabha, the lower house of the Indian

Parliament, the social media is said to reach the urban areas of India.

By gaining followers, the BJP is hoping to also gain supporters.

Intense Political Competition & the

Effects on Margin of Victory

There has been a rapid growth in political competition particularly over the past two decades.

Rapid growth and intensity in political competition in India has caused the margin of victory to reach an all-time low in 2009.

The reason for this intense competition can be seen as the result of an increase in voter turnout across all states in India.

The decline in the margin of victory has proven to be the result of the increase competition in politics in India. Over the years, India has seen an increase in the number of parties participating in the elections.

The general election in 1952 had 55 parties take part. This was the first election since India won Independence. Between 1989s and 2009s general election is where the greatest increase in political party participation can be seen ranging from 117 to 370 parties taking part.

Intense Political Competition & the

Effects on Margin of Victory

In the early 1950s through the early 1980s, there were an average of 19 parties

participating in the elections who won seats in parliament.

However, this number nearly doubled in 1989, with 33 parties winning seats in

parliament.

In 2009, 37 of the 370 taking part in the election won seats in parliament.

With such increase in the number of parties participating and gaining seats in parliament, India had converted from a single party rule to a multiparty coalition government in 1989.

The decrease in margin of victory resulted in more representation in Indian parliament.

Technology TrendsM2M, CEM, eCommerce

M2M (Machine to Machine)

“Enables modules embedded in devices & objects to intellectually

exchange information in real time over wireless networks and backbend

platforms to enhance an all pervasive digital lifestyle” –Economic Times

India’s Next wireless communications revolution.

Product companies can create additional value & drive differentiation in

the market.

M2M (Machine to Machine)

Opportunity for India’s mobile network operators (MNOs) to building more

businesses beyond traditional mobile services.

Recently launched 4G will form backbone of M2M communication in the

future.

M2M (Machine to Machine)

In nascent stage, but expected to grow rapidly.

Expected to reach 98.38 USD Million by 2016.

Compound growth rate: 33.81% since 2011

MNOs can capitalize on systems & integration and application

management needs.

CEM (Customer Experience

Management

New & enhanced

CEM solutions will help eliminate the fragmented high effort service that

jeopardizes customer loyalty.

Strategic discipline that assists in all aspects behind great customer service

including the planning, creating & managing.

Integration of internal capabilities (systems & processes) and external

influences (competitive forces/technology trends/customer context)

CEM (Customer Experience

Management

Significant business benefits:

Improved customer satisfaction by deliver

relevant and contextual products

and services.

Reduced operation cost due to reduced

customer service issues.

Engaged revenue by acquiring new

customers, leaving existing customer

referrals and upselling new products and

services.

Engaged employees due to increased

customer retention.

eCommerce

With the growing number of entrepreneurships, including small business, in

India, many are focusing in on online retail.

eCommerce in India has grown rapidly, the IAMAI (Internet & Mobile

Association of India) provided the following information:

eCommerce was projected to reach a market of 1.8 USD Billion in 2013.

In 2012, the base market size was 1.2 USD Billion.

The 77 million Indians with consumer awareness and who have adapted to

using online shopping websites have contributed to the growth in market

size.

Selection, deals, convenience and access to products are all primary

drivers for the success of eCommerce.

eCommerce

eBay India

Leading online marketplace in India.

Entrepreneurs & brands are offered the best platform to trade nationally &

globally.

The next step for eCommerce is Mobile Commerce. Mobile commerce

allows online shopping through portable devices such as smartphones and

tablets. Mobile commerce will give online shoppers the ability to make safe,

easy and convenient transactions.

Mobile Commerce is still in its infant stage. However, with cheaper devices

and better internet rates, India expects even more significant growth for

Mobile Commerce

Key Types of Business in

India

Key Types of Business in India

Between April 2012 through September 2013, India exported 1.42 USD

Billion.

The lead export of India during this time was petroleum products.

Exported 56 USD Billion

India has exported more items to the United States.

Exporting 19.7 USD Billion

India’s second largest exporter was the UAE.

Exported 18.6 USD Billion

Key Types of Business in India

$56

$47

$24

$21

$14

$14

$10

$9$7 $7

Top Exports (USD Billion)Petroleum Products

Gems & Jewlery

Pharmacutical Products

Transport Equipment

Machinery & Instruments

Readymade Garments

Manufactures of Metals

Electronics

Rubber & Glass Products

Cotton, Yarn & Fabrics

Trade in India

Trade in India

According to Trading Economics, India has a trade deficit of 8,130.20 USD

Million as of February 2014. This balance was recorded by the Ministry of

Commerce & Industry, India.

Trade in India

Balance of Trade, Defined

“The difference between a country’s imports & its exports. Balance

of trade is the largest component of a country’s balance of

payments. Debit items include imports, foreign aid, domestic

spending abroad & domestic investments abroad. Credit items

include exports, foreign spending in the domestic economy &

foreign investments in the domestic economy. A country has a

trade deficit if it imports more than it exports; the opposite scenario

is a trade surplus” -Investopedia

Trade in India

Between 1957 and 2014, the Balance of Trade in India averaged -1,809.03

USD Million.

India’s highest trade average was 258.90 USD Million in March 1977.

India’s lowest trade average was -20,210.90 USD Million in October 2012.

Trade in India

Why is there a trade deficit in India?

Trade deficit in India is due to the low export base & high imports for energy

needs (coal & oil).

In just a year, the trade deficit with the United States has decreased immensely.

In January 2014, India had a trade deficit with the US of -2,093.00 USD Million.

Whereas in 2013, India had a trade deficit with the US of -19,953.70 USD Million.

Trade in India

India is the leading exporter of:

Petroleum Products

Gems & Jewelry

Textiles

Engineering Goods

Chemicals

Services

Trade in India

India’s Main Trading PartnersEuropean Union

Countries

•Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom

United States China

UAE

•Emirates of Abu dhabi, Dubai, Sharjah, Ras al Kaimah, Fujairah, Ajman, Umm al Quwain

Understanding

Business in IndiaThe Culture & People of India

Understanding Business in India

When doing any type of business in India, or any foreign country, it is

essential to understand the culture and people of said country.

Having this adequate knowledge and understanding will allow for a

successful business transaction with the said country.

It is essential for any firm or country that is doing business in India is aware of

any current trends and issues that the country, or region, may be facing.

We previously highlighted trends and issues that are facing India today,

being able to link the culture to the trends is again, essential.

Culture & People of

India

Culture & People of India

Culture plays a significant role in any business negotiation or transaction

taking place.

Before attempting to do any type of business in India, it is essential to keep

a few key concepts in mind (see slides to follow).

Culture & People of India

Business in India tends to move slowly.

The importance of relationships in India is the main reason for this.

Trust plays a large role in any business transaction, with as much

importance as statistical data.

Small talk is generally initiated prior to talk of business to allow for the

building of relationships.

Small talk may vary.

Small talk may include questions about family, your job & your salary.

Culture & People of India

Hierarchy plays a large role in India.

It is suggested to go directly to the top person of the firm in which you are

negotiating.

An already slow process becomes much slower when negotiating with a

person who is not at the top of the hierarchy in the firm you are working

with.

Meetings may be scheduled with someone who is not at the top of the

hierarchy.

If this occurs, a decision will not be made at that time, but rather a later time.

Culture & People of India

Business meetings have much different etiquette than a Western style

meeting.

Interruptions by phone calls and staff are very common.

This is not to be taken personally, as it is part of the Indian culure.

It is seen as being impolite if you ignore your phone or a staff member, regardless

if you are in a meeting.

When this occurs, be patient and polite.

It is important for you to be on time, but whom you are meeting with may

be behind schedule, or you may have to reschedule your meeting at the

last minute.

Culture & People of India

The process of business transactions can be seen as tedious to those who

are used to a Western style management.

While some businesses are adapting this approach, many are set in their

cultural ways.

Culture & People of India

India is a very populated country. However, that being said, India is one of

the most diverse countries in the world.

India has many religions and languages which separates its people.

English is one of the official languages of India and is used when conducting

business.

While English is an official language of India, as with other countries, meanings

may vary.

Often times, Indians will avoid using the word “no”, and say something that may

come off as offensive.

It is important to not take offense or ask for a direct response.

Instead, restate your question to get a more direct response.

Refrences

Refrences

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Refrences

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ciol.com/ciol/news/29655/top-technology-trends-india/page/2

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